Moody’s downgrades Steinhoff

Moody's Investors Service said it downgraded the issuer ratings of Steinhoff International Holdings NV and Steinhoff Investment Holdings Ltd., and the senior unsecured notes rating of Steinhoff Europe AG, by four notches to B1 from Baa3.

At the same time, Steinhoff Investment Holdings’ national scale long-term issuer rating was downgraded to Baa3.za from Aa1.za.

The ratings were simultaneously put under review for further downgrade.

The downgrade of Steinhoff's ratings and review for further downgrade reflect the uncertainties and implications for the company's liquidity and debt capital structure arising from an announcement by Steinhoff's Supervisory Board on 6 December 2017,” Moody’s said in a news release.

“The Supervisory Board advised that new information has come to light which relates to accounting irregularities requiring further investigation with the possibility of restatement of prior years' financial statements. This prompted the immediate resignation of the CEO.”

The agency added that given that allegations of accounting irregularities were raised and rebutted in August 2017 and again in November 2017, it calls into question the quality of oversight and governance at Steinhoff.

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